A certain magazine offers its subscribers the opportunity to "Buy Now and Save." If at the time their subscription renewal is due they agree to pay for 2 years rather than 1, the renewal price will be $50 per year rather than the usual $60 per year. At what interest rate will the consumer, who is certain she will subscribe to the magazine for the next 2 years, decide to "Buy Now and Save"?
A) Any interest rate under 50 percent
B) Any interest rate over 1.5 percent
C) Any interest rate over 150 percent
D) Any interest rate under 5 percent
E) She will always take this offer if she is absolutely certain to buy the magazine for another 2 years.
Correct Answer:
Verified
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